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Chronicle Live
National
Graeme Whitfield

Unemployment falls in North East but is still highest in the UK

Unemployment has fallen slightly in the North East but remains the highest in the UK, according to new figures.

The figures from the Office for National Statistics (ONS) show a 5.5% level of unemployment in the region, down 0.1% from the previous month but still well above the national level of 4.0%.

The number of people in work in the region is below where it was a year ago, however, due to a rise in the number of people classed as ‘economically inactive’. A total of 83,515 people are claiming unemployment benefits, down slightly on last month but still above pre-pandemic levels.

Read more: go here for more jobs news

There have been warnings that the end of Covid regulations will lead to some job losses in the North East, with more than 600 people likely to be made redundant from the Lighthouse testing lab at Gateshead.

Business groups in the region said challenges remain for the North East economy.

North East LEP chief executive Helen Golightly said: “Today’s statistics also shows that our labour market continues to face long term challenges with the highest unemployment rate, the highest percentage of people who have left the labour market and the lowest rate of people in work in England - whilst other regions are moving ahead as they recover from Covid-19.

“Other data shows there is an opportunity to do more. Employers are reporting continuing demand in the labour market and difficulties in recruitment, and yesterday’s over fifties lifestyle study suggests that further encouragement for older workers who have left the labour market since the start of the pandemic could see them return.

“There are now 18,000 more 50 to 64 year olds who are classified as economically inactive in the North East region compared to before Covid-19. 39% of over fifties who have left the labour market nationally would consider returning to work, including 58% of 50-59 year olds, but they would need the right conditions and support to do so.

“At a time when the costs on families from general inflation and energy price rises are increasing rapidly, we urge Government to strongly and urgently focus on the needs of the North East to encourage more progress in the labour market.”

Read more: jobs at risk with closure of Lighthouse Lab

Arlen Pettitt, knowledge development manager at the North East England Chamber of Commerce said: “Today’s figures paint the picture of a regional economy trying its best to grow in really difficult circumstances. There are some encouraging signs, including an increase in the number of people in employment and a fall in economic inactivity, but our unemployment rate remains stubbornly and significantly higher than the national average.

“Our members are telling us of staff shortages in key industries, especially for roles requiring specialist skills like developers and motor industry technicians. These shortages limit growth and push up costs – just as individuals are struggling with the cost of living, so are businesses struggling with the cost of doing business as inflation hits energy prices and raw materials.

“With the Chancellor’s Spring Statement a little over a week away, we need to see immediate action from him to ease these pressures, alongside efforts across Government to turn levelling up into a reality.”

Nationally, the number of UK workers on payrolls rose by 275,000 between January and February to a record 29.7m, the Office for National Statistics said.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “The labour market continues to recover from the effects of the pandemic, with the number of unemployed people falling below its pre-pandemic level for the first time and another strong rise in employees on payroll in February.

“However, the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level.

“We have seen yet another record number of job vacancies, and with the redundancy rate falling to a new record low, demand for workers remains strong.

“Because bonuses have continued at high levels for some workers, total earnings growth just kept ahead of rising prices over the past year, though regular pay has dropped again in real terms.”

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